Nadar's $500m fund eyes US health tech companies

HCL's billionaire founder and chairman Shiv Nadar and former Tech Mahindra CEO Sanjay Kalra are establishing a $500-million proprietary fund to acquire US healthcare technology companies and invest in IT products and platforms that can bring greater efficiencies to the US healthcare system.Avik Das&Sujit John | TNN | Updated: September 14, 2015, 09:18 IST

Phoenix is among the nearly 700 medical equipment companies medical device industry that make affordable alternatives to equipment supplied by global giants.BENGALURU: HCL's billionaire founder and chairman Shiv Nadar and former Tech Mahindra CEO Sanjay Kalra are establishing a $500-million proprietary fund to acquire US healthcare technology companies and invest in IT products and platforms that can bring greater efficiencies to the US healthcare system.

This will probably be the first instance of an Indian fund being set up with the intention to acquire global assets and with the objective of addressing an overseas market problem.

The move comes at a time when the Affordable Care Act (ACA), also known as Obamacare, is transforming the US by bringing low-income uninsured Americans under the government medical programme. Many Indian IT companies, such as Infosys, Wipro, TCS and Tech Mahindra, are aiming for a larger slice of the pie in the US healthcare vertical. But those tend to be on the IT services side.

Nadar and Kalra's venture, christened SNSK (Shiv Nadar-Sanjay Kalra) Associates, will focus on IT products and platforms. "ACA and the change in regulations are perhaps giving us an opening where we can go and have an impact in the industry. Data and analytics will play a big role in next generation healthcare solutions," Kalra, also the chairman of SNSK Associates, told TOI.

Of the total fund size, $200 million is the combined capital infusion by Nadar and Kalra, with Nadar owning 80% and Kalra the rest. The remaining $300 million is debt, though Kalra declined to name the sources. Nadar is worth about $13 billion and ranked fourth on Forbes' list of billionaires in India for 2015.

Asked how the two got together and about the origin of the idea, Kalra said Nadar had been a mentor to him for a long time - Kalra worked at HCL between 1994 and 2003 handling strategic responsibilities - and they were looking for a large-scale problem to solve, since both had handled such problems in the past. US healthcare spending is about $3.2 trillion annually, or about 18% of its GDP. "We are operating professionals with capital. We will be involved in the companies that we acquire and invest in, we will bring our entrepreneurial passion, our network of global relationships, use India-based R&D capabilities, and globalize the solutions that are developed," Kalra said.

“We are operating professionals with capital. We will be involved in the companies that we acquire and invest in, we will bring our entrepreneurial passion, our network of global relationships, use India-based R&D capabilities, and globalize the solutions that are developed,“ Kalra said.

The fund plans to acquire mature US healthcare technology companies with investments in the range of $50 million to $200 million. It will also invest in healthcare startups in the US and India which they believe can transform the mature companies through technology and talent expertise.

SNSK MD Mahesh Nagaraj, a former senior executive at HCL and Tech Mahindra, said the plan was to have IT systems that span across the whole continuum of healthcare providers, from physicians to long-term acute care.